This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers, click the "Reprints" link at the bottom of any article.

August 17, 2012

Top Portfolio Products: Russell Launches Two New Funds

New portfolio developments over the last week include two new funds and from Russell Investments, equity allocation changes to other Russell funds, and a projection on custom target-date funds from Cerulli.

In addition, ArtBanc allied with NFP Life to advise owners of fine art on tax and estate planning issues involving their collections.

These reallocations included changing the investment strategies, names and benchmarks of the Russell U.S. Growth Fund (RSGCX) and the Russell U.S. Quantitative Equity Fund (REQTX) to incorporate insights based on the Russell Stability Indexes style-based benchmarks. The Russell U.S. Growth Fund was renamed the Russell U.S. Dynamic Equity Fund and the Russell U.S. Quantitative Equity Fund was renamed the Russell U.S. Defensive Equity Fund.

The Russell U.S. Dynamic Equity Fund, previously the Russell U.S. Growth Fund, has changed its investment strategy from investing in growth stocks to a dynamic style of investing, and may implement a limited long-short strategy. Its benchmark will change from the Russell 1000 Growth Index to the Russell 1000 Dynamic Index.

Additionally, the Russell U.S. Defensive Equity Fund, previously the Russell U.S. Quantitative Equity Fund, will change its investment strategy from a quantitative investment approach to a defensive style of investing and discontinue the limited long-short strategy. Its benchmark will change from the Russell 1000 Index to the Russell 1000 Defensive Index.

2) Custom TDFs Will Surge to $218 Billion by 2016: Cerulli

Cerulli Associates projects that custom target-date strategies will account for 22% of 401(k) target-date assets by 2016, the consulting group said Friday in “The Cerulli Report: State of Large and Mega Defined Contribution Plans: Investment Innovation and the Plan Sponsor Perspective.” This would put the amount of custom target-date fund assets in defined contribution plans at $218 billion, up 370% from the $46.4 billion posted in 2011.

Given that target-date funds had overall second-quarter returns of 2.8% and 12-month returns of -0.5%, according to the research group Ibbotson Associates, investors may be looking for custom target-date funds as a way to improve returns.

Last week, ArtBanc and NFP Life announced a strategic alliance to provide collectors and estate attorneys with an integrated solution to these matters.

The partners will address the reduction of potential estate tax and estate distribution taxes, penalties and proper planning for tax implications of fine art collection ownership. They will also enable clients to borrow against their collections to help resolve estate tax and estate planning issues.